Title
A RESOLUTION AUTHORIZING THE MAKING OF CERTAIN IMPROVEMENTS TO THE SEDGWICK COUNTY COURTHOUSE COMPLEX; AND PROVIDING FOR THE PAYMENT OF THE COSTS THEREOF.
Presented by: Lindsay Poe Rousseau, Chief Financial Officer, Division of Finance.
RECOMMENDED ACTION: Adopt the Resolution.
Body
Background: The Resolution declares an intent to construct improvements to the Courthouse Complex, specifically including the County’s Adult Detention Facility, and to provide for the payment of costs thereof by the issuance of general obligation bonds of the County.
|
Project Description |
Cost Estimate |
|
Remodel and Expansion |
$5,497,094 |
|
Roofs |
887,597 |
|
Generators |
330,750 |
|
Total |
$6,715,441 |
Analysis: This resolution authorizes the issuance of general obligation bonds of the County (the “Bonds”) in an amount necessary to pay the costs of the Project and related costs of issuance of the Bonds, which is estimated to be an aggregate amount of $6,820,000. The Bonds shall be issued by the County at a later date and may be combined with financing for any one or more other improvement projects of the County as may be determined by the Board to be in the best interests of the County. The Bonds authorized and issued pursuant to this Resolution may be used to reimburse Project expenditures made on or after the date which is 60 days before the date of this Resolution, pursuant to Treasury Regulation 1.150-2.
The Bonds authorized in this resolution are scheduled to be sold in 2019.
Alternatives: This Project could be funded by imposing a limited extraordinary property tax to provide cash for the expansion; however such a property tax could be subject to the provisions of the tax lid in K.S.A. 79-2925c. To accumulate adequate cash to cover the costs of the expansion over five years, an estimated additional 0.300 mills per year would be necessary.
Financial Considerations: As general obligation debt, the Bonds will be secured by a pledge of the County’s full faith and credit, meaning bondholders will be able to compel the levy of property taxes if necessary to repay the debt.
The preliminary estimate of annual debt service required to repay these bonds is $431,708. The financial forecast contemplates that planned property tax levies and funding streams for the County’s Debt Service Fund will be adequate to fund this annual debt service without a mill levy rate increase. The source of funds used to repay this debt will be determined annually through the budget adoption process.
Legal Considerations: K.S.A. 19-1510, as amended by Charter Resolution No. 56 (collectively, the “Act”) authorizes the Board of County Commissioners (the “Board”) of Sedgwick County, Kansas (the “County”) to erect, construct, reconstruct or improve a courthouse and to construct additions and improvements thereto; and for the purpose of paying the cost and expenses thereof, may issue general obligation bonds of County without the same being authorized by an election called or held for such purpose.
Policy Considerations: These Bonds are subject to the County’s adopted debt policy. It provides five ratios that constitute limits on the total County debt that may be outstanding at any point.
Per that policy, the debt issuance is permitted so long as three of the first four ratios listed below are below the stated maximums; debt issuances may not be done if doing so would cause the fifth ratio to exceed the limit.
As such, while the ‘per capita direct, overlapping and underlying debt’ ratio, which accounts for all debt issues by all taxing entities within Sedgwick County, is exceeded, this debt issuance is permitted. Further, the first metric, ‘per capita direct debt’, illustrates this ratio for Sedgwick County government only, and is well below the prescribed limit.
|
|
|
Estimated |
|
|
Policy |
Actual |
|
Ratio |
maximum |
12/31/2019 |
|
Per capita direct debt |
$500 |
$200 |
|
Direct debt as % of full market value |
1.5% |
0.27% |
|
Per capita direct, overlapping & underlying debt |
$3,000 |
$3,793 |
|
Direct, overlapping & underlying debt as % of full market value |
6.0% |
5.41% |
|
Annual debt service as % of budgeted expenditures |
20% |
8.18% |
Outside Attendees: Joe Norton and Garth Hermann, Gilmore & Bell, P.C. (bond counsel).
Multimedia Presentation: No.